Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1887-09-01

and foreign countries have resulted in
net export of more than half -a-million
per annum during the past ten years. and
the circulation of bank notes has decreas-
ed by eight millions since 1877. Bank
credits have taken the place of both.
The economizing practice of modern
times may be described thus: bank is
visited by customer, who deposits &C
ceptable security, and obtains an advance
from the bank of what? Not money;
for the bank simply writes down so many
hundreds of pounds to the credit of the
borrower, who thereupon takes cheque-
book and writes out orders to
persons having accounts with that
or other banks. The cheques are passed
through the clearing house, and at the
end of the day the bank has had to pay
little or no money, and hardly coin has
been passed In consequence of the trans
action. So bank deposits multiply, and
banks all over the country virtually sup
ply what is equal TO new money by mere
engagement to pay money on demand.
This economizing of gold may be pushed
too far, but the effect hitherto has been
to enable the country to spare gold in
stead of competing with foreign nations
for the new supply of the mines; and,
that being so, the bi-metallist's assertion
that were money made abundant by the
use of silver as we'll as gold prices wosld
rise and producers would be restored to
solvency, becomes doubtful. Automati-
cally and, so to say, privately, the country
has Tended off the scarcity of gold by
using bank cheques instead of gold.
What is to be gained by adding silver, if
the gold currency left to itself is ade-
quate?
Further, it may well be insisted that
the soundness of our currency hitherto
has made this economy of gold possible.
In France, which tried bi-metallism for
several years, and still has the wreck of
that system, deposit banking did not de-
velop as it has developed in England dur
ing the last fifty years of a sound single
gold standard. The reason might not
have been solely the difference of cur
rencies, but the difference is always
worth notice. High authorities on eco
nomical matters have doubted whether
England would remain the home of cap
ital or the clearing house for national
Indebtedness where the currency tamper-
ed with. 1t may be stated as quite an
established axiom that the worse 8 coun-
trys currency the more there is needed
LII huSSla, Wnlcn mas the worst currency
of any great nation, there are too many
paper roubles. Even in France the sums
boarded by the people and in the Bank
OF France are enormous. The greater
and wider the confidence in a currency,
the more effective will it be for USE
Diminish the confidence of creditors in
the soundness of the currency in which
they are paid, and contradiction of
credit will be the consequent tendency.
Governments can say to peoples: "Here
is unlimited silver, which you may use in
place of gold" but a people needs quality
first IN matters of currency and quality
afterwards. We might almost go further,
and lay it down that, given currency
of good Quality, there is little need for
concern about quantity. Experience in
England has been that good currency
can be stretched indefinitely.